Laksamana given control over IBRA

Laksamana given control over IBRA

JAKARTA (JP): President Megawati Soekarnoputri placed the
Indonesian Bank Restructuring Agency (IBRA) under the control of
State Minister for State Enterprises Laksamana Sukardi, a move
some analysts said would expedite the agency's debt restructuring
work.

Coordinating Minister for Security Affairs Susilo Bambang
Yudhoyono said on Monday that Laksamana was given control over
IBRA which was formerly under the finance ministry.

"The minister of finance should guard the country's revenues,
and IBRA will be placed under Laksamana Sukardi," Bambang said in
a press conference following the first Cabinet meeting of the new
government.

The repositioning of IBRA was part of a major reshuffle of the
government's economic portfolio.

Without IBRA, Bambang said, the finance ministry was to focus
on its primary task to secure the country's fiscal
sustainability.

Bambang gave no further details on the reshuffle and did not
explain the legal basis of the President's decision.

Government regulation No. 17/1998 places IBRA under the
finance ministry. Transferring the agency under Laksamana's
office would then require a revision of the government
regulation.

IBRA was founded in early 1998 to restructure bank bad debts
and sell assets taken over from ailing banks and former indebted
bank owners in the aftermath of the mid-1997 economic crisis.

To date, the agency is in control of nearly Rp 600 trillion
(about US$69.76 billion) in assets, making it a key player in the
country's economic recovery.

For this fiscal year, IBRA must raise some Rp 27 trillion in
revenue to help fill the gaping state budget deficit.

"It has been decided to have the control of IBRA placed
alongside that of state enterprises so that there is synergy
between the asset sales of both," Finance Minister Boediono later
explained.

The State Ministry for State Enterprises is also in charge of
privatizing several state companies to raise cash to help finance
the budget deficit.

Boediono said that the transfer of IBRA would also allow him
to better concentrate on the state budget.

IBRA chairman I Putu Gede Ary Suta told The Jakarta Post he
was unable to ascertain the impact of the new decision on IBRA
yet, saying that he must study it first.

There has also been speculation that Ary Suta, who assumed the
current position late in June, may be dismissed from the agency.

Analysts hailed the decision as helping both, IBRA and the
finance ministry.

Research director at SG Securities Pte Ltd., Lin Che Wei said
the privatization and sale of IBRA's assets were more or less the
same thing.

Under Laksamana, he said, IBRA should be able to speed up
asset sales, as a large portion of debts it took over belonged to
state firms.

"And we know the times when IBRA's restructuring deals fell
behind in their implementation was because the (previous) finance
minister hadn't sign them -- he didn't understand them," he said.

According to him, Laksamana Sukardi is the right person to
take control of IBRA.

"The man has integrity, and enjoys broad political support,"
he said.

Laksamana Sukardi belongs to the country's largest political
party, the Indonesian Democratic Party of Struggle (PDI-P), led
by Megawati.

He had served as State Minister of Investment and State
Enterprises under the first Cabinet of former president
Abdurrahman Wahid.

Laksamana's strong drive to stamp out corruption was evident
in 1999, when he raised suspicion over loans provided by state
Bank Negara Indonesia (BNI) to the giant textile Texmaco group.

Many believe his endeavor cost him his job at the time.

Abdurrahman, who reportedly had links with the Texmaco group,
dismissed Laksamana on corruption charges that were never proven
in court.

Che Wei said with Laksamana's reputation, the market expected
him to purge IBRA from politically connected debt restructuring
deals.

Also, the market hoped to see Laksamana make headway in IBRA's
thus far feeble attempts to declare bankrupt uncooperative
debtors.

He further suggested the government eliminate the position of
IBRA chairman and entrust the role to the state minister.

It would help IBRA make faster decisions without asking for
the state minister's approval, he explained.

Economist Faisal Basri, however, questioned the political
motives behind the hand over of IBRA's assets.

He said Laksamana's connection to PDI-P was bound to raise
suspicion whether making him responsible for IBRA was purely
based on reasons of efficiency.(bkm/dja/05)